Why Invest in Commercial Office Space
Investing in commercial office space offers various benefits. It provides a reliable and steady source of income through rental income, and it tends to appreciate over time. Investing in office space also diversifies your real estate portfolio, reducing the risk of investing solely in residential properties.
In offices, the rental income is 7% to 10% of the property’s value in a year, several times more than what you earn from a residential property.
In the last few years, demand for office space has kept increasing because of business growth due to the strong Indian economy. Here are some of the points you should keep in your mind while investing in Office Space Property
Investment in Best locations
Always remember one thing while investing: Real Estate is all about Location, Location, and Location. Especially in uncertainty, the market always rewards those who only choose the best locations. If the office building in which you have invested is not in a good location, there is a chance that you won’t get good appreciation and rental returns. The only way you get a buyer or tenant at a lesser-known place is when a Grade A location is almost occupied. Another way is by reducing the price of your property, which can put you in a tight situation.
Condition of Property
Only buy an office space that is in good condition. It will consume much of your profits and scare away most future buyers and tenants. The problem with office buildings is that they typically require very high maintenance. A poorly built and maintained property can regularly be a financial drain. I suggest you buy into a new building with no repairs and a sound maintenance system.
Quality Tenants
If you invest in office space for rental income, a long-term lease with a sketchy tenant is not advisable. Try to find tenants who will pay rent in good and bad times. That does not mean you need flashy big business companies; you need a tenant with a track record of paying. What a company does is immaterial; all that matters is its track record of paying rent on time.
Timing of Investment
Timing is essential when you are investing in real estate. When investing in real estate, you always want to buy low and sell high, not vice versa. Never buy during a cyclical high in the real estate market, but only when prices are at a stable base. Remember that it would only take a correction of 15% to 20 % in the real market to derail your investment, so investing requires a little patience in making any decision.
Benefits
You can also invest in commercial property at the under-construction stage, like residential properties. This way, you can arrange your funds quickly and go for a more extensive property as you don’t have to pay all the money in 60 to 90 days. Another benefit is that you can have appreciation in the property as, most of the time, property rates are 15% to 20% higher when the construction is complete.
Another way to invest is to buy a pre-leased property; this will save you the trouble of finding tenants, and you can start getting rentals right from the first day of your investment.
Best Commercial Office Space Projects
- Bhutani Cyber Park Sector 62 Noida
- GYGY Mentis Sector 140 Noida
- Golden Grande Greater Noida West
- Orion 132 Noida Sector 132 Noida
- Bhutani Grandthum Greater Noida West
- Eon – Eye of Noida Sector 140A Noida
- Bhutani Cyberthum Sector 140A Noida
Conclusion
Investment in commercial office space has to be managed differently than investment in residential property. Office spaces can be a good bet if you want to diversify your real estate portfolio. Investing in office property is an excellent way to earn high rental income and gain capital appreciation. Remember while investing in office space, your investment horizon has to be much longer. Office units are mostly bigger than residential spaces, and this means a more significant investment
I suggest you do your research before investing, and if you have any queries or want the best deal on any commercial office space project, you can mail me at hello@vikasjoshi.in or call 9599705565
Read: How Rental Income from Commercial Property Can Build Wealth
Frequently Asked Questions (FAQ`s)
Why is Investing in Commercial Office Space a Good Idea?
One of the main reasons you should invest in commercial office space is that you can generate long-term passive income through rentals, and it also has the potential for high returns in the form of property appreciation.
Is Commercial Office Space a Good Investment Option in India?
Buying a commercial office space is a wise decision as there is a huge demand for office space in India due to growth in the Indian economy, and the future of commercial real estate is very bright.